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2007 Supreme(Del) 2148
High Court Of Delhi
BADAR DURREZ AHMED
CITI FINANCIAL CONSUMER FINANCE INDIA LTD - Appellant
Versus
MAHESH CHAND MATHUR - Respondents
OMP 118 Of 2007
Decided On : 09/26/2007
Meenu Nanda
The court's decision highlights the importance of protecting the security interest of a party in a loan agreement through interim injunctions under the Arbitration and Conciliation Act.
Headnote:
Interim Injunction - Arbitration and Conciliation Act - The court granted an interim injunction under Section 9 of the Arbitration and Conciliation Act, 1996, restraining the respondents from disposing of the mortgaged property until the arbitration proceedings are concluded.
Fact of the Case:
The petitioner had granted a loan to the respondents, secured by a property mortgage. Disputes arose, and the petitioner sought arbitration as per the agreement. The petitioner filed for an interim injunction fearing disposal of the mortgaged property by the respondents.
Finding of the Court:
The court found that the petitioner's apprehension of the property being disposed of was valid, as the respondents did not appear despite notice. The court granted the interim injunction to prevent any disposal of the property until the arbitration proceedings are completed.
Issues: The main issue was the petitioner's apprehension of the mortgaged property being disposed of by the respondents, leading to the need for an interim injunction.
Ratio Decidendi: The court's decision was influenced by the absence of the respondents and the uncontroverted statements in the petition, leading to a valid apprehension of the property being disposed of.
Final Decision: The court granted the interim injunction, restraining the respondents from selling, transferring, or creating any third-party interest in the mortgaged property until the arbitration proceedings are concluded.
( 1 ) THIS is an application for interim injunction under Section 9 of the arbitration and Conciliation Act, 1996. The notices issued to the respondents by virtue of an order dated 1. 5. 2007 have been served on the respondents. Nobody appears on behalf of the respondents.
( 2 ) AS per the application the respondents had approached the petitioner for grant of a loan. An agreement had been entered into between the petitioner and the respondents on 30. 5. 2005. The amount of the loan was to the extent of rs 37,00,000/ -. The said amount was advanced and disbursed on 30. 5. 2005 and was to be repaid by the respondents in 164 equated monthly instalments of Rs 43,568/ -. As security for the loan, the respondents mortgaged the property No. B-111, Saraswati Marg, Bajaj Nagar, Jaipur, by creating an equitable mortgage in favour of the petitioner. The original Title Deed was handed over to the petitioner. Disputes have arisen between the parties and the said agreement contains an arbitration clause. The venue of the arbitration is Delhi and the arbitration is to be conducted by a sole arbitrator to be appointed by the petitioner. By a notice dated 17. 10. 2006 the petitioner informed the respondents of its intention to refer the matter to Mr S. K. Jain, Advocate for arbitration.
( 3 ) AS stated in the petition, the petitioner has a strong apprehension that the mortgaged property, which is the only security with the petitioner, is likely to be disposed of by the respondents. Since the statements made in the petition have been uncontroverted due to the absence of the respondents despite the service of notice on them, the said statements have to be taken as correct.
( 4 ) ACCORDINGLY, this petition is disposed of with the direction that the respondents, their agents, assigns are restrained from selling, disposing off, transferring, alienating or creating any third party interest in property No. B-111, Saraswati Marg, Bajaj Nagar, Jaipur in any manner whatsoever till the disposal of the arbitration proceedings.
